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AGRICULTURE 


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UNIVERSITY    OF    ILLINOIS    LIBRARY    AT    URBANA-CHAMPAIGN 

T 


UNIVERSITY  OF  ILLINOIS 

Agricultural  Experiment  Station 


BULLETIN  No.  277 


COST  OF  PRODUCING  FIELD  CROPS 

IN  THREE  AREAS  OF  ILLINOIS 

1913-1922 

BY  EMIL  RAUCHENSTEIN  AND  R.  C.  Ross 


URBANA,  ILLINOIS,  JUNE,  1926 


CONTENTS 

PAGE 

INTRODUCTION   39 

Areas  Studied  39 

Ways  in  Which  Cost  Items  Were  Determined 41 

Distribution  of  Income 42 

Accounts  Summarized  in  Terms  of  Efficiency  Factors 42 

CROP  COSTS  SUMMARIZED  BY  AREAS 43 

Franklin  County 43 

Hancock  County 45 

Costs  in  Franklin  and  Hancock  Counties  Compared 48 

Champaign  and  Piatt  Counties 50 

Profitable  Crop  Rotations 51 

CROP  COSTS  SUMMARIZED  BY  PERIODS 54 

Cost  of  Corn  During  Different  Periods 56 

Cost  of  Wheat  During  Different  Periods 57 

Cost  of  Oats  During  Different  Periods 59 

Cost  of  Clover  During  Different  Periods ; 61 

VARIATIONS  IN  COSTS  ON  DIFFERENT  FARMS : 64 

Importance  of  Management  in  Determining  Farm  Success 64 

APPLYING  THE  RESULTS  OF  COST-OF-PRODUCTION  STUDIES. .     .  67 


COST  OF  PRODUCING  FIELD  CROPS 
IN  THREE  AREAS  OF  ILLINOIS 

1913-1922 

By  EMIL  RAUCHENSTEIN,  Formerly  Assistant  Chief  in  Farm  Organization 
and  Management,  and  ROBERT  C.  Ross,  Associate1 

INTRODUCTION 

During  the  ten-year  period  from  1913  to  1922  inclusive,  a  consid- 
erable number  of  Illinois  farmers  cooperated  with  the  University  in 
keeping  detailed  cost  accounts  on  their  farms.  It  is  the  purpose  of  this 
bulletin  to  present  some  of  the  results  of  these  investigations  in  so  far 
as  they  apply  to  crops.  The  information  is  presented  first,  by  areas,  in 
order  that  farmers  may  use  the  data  as  a  basis  for  planning  profitable 
cropping  systems;  second,  by  periods,  showing  the  trend  of  costs  and 
incomes  during  the  pre-war,  war,  and  post-war  periods,  in  order  to 
emphasize  the  importance  of  adjusting  farm  practices  to  meet  general 
economic  conditions;  and  third,  by  farms,  in  order  to  show  variations 
in  costs  as  affected  by  management,  and  the  importance  of  manage- 
ment in  determining  farm  success. 

The  authors,  in  this  bulletin,  have  attempted  to  show  the  relative 
profitableness  of  crops  under  prevailing  farm  practices,  rather  than  to 
study  the  results  of  different  practices.  Sufficient  explanation  and 
analysis  are  added  to  bring  out  the  significance  of  the  figures  and 
enable  the  reader  to  apply  them  to  his  own  conditions.  Costs  and 
income,  so  far  as  possible,  are  expressed  in  physical  terms,  that  is,  in 
hours  of  labor,  bushels  of  produce,  etc.,  as  well  as  in  money  values, 
since  such  measures  are  much  more  useful  in  planning  profitable  sys- 
tems of  farming  than  are  money  values,  which  are  constantly  changing. 

AREAS  STUDIED 

Detailed  cost  records  have  been  kept  on  six  to  ten  farms  in 
Franklin  county,2  and  on  approximately  the  same  number  of  farms 
in  Hancock  county  for  the  ten-year  period  1913-1922.  Since  March  1, 
1920,  similar  records  have  been  kept  on  ten  to  fifteen  farms  in  Cham- 
paign and  Piatt  counties. 

1This  study  was  conducted  during  its  entire  period  under  the  immediate  supervision  of  Pro- 
fessor Walter  F.  Handschin,  Chief  in  Farm  Organization  and  Management,  whose  death  occurred 
in  1922.  In  addition  to  some  present  members  of  the  staff,  Messrs.  J.  B.  Andrews,  C.  A.  Bon- 
nen,  W.  J.  Roth,  and  J.  R.  Wells,  former  members  of  the  staff,  were  at  different  times  associ- 
ated with  the  work.  Others  who  served  a  year  or  longer  in  collecting  the  data  from  the  field 
include  Messrs.  F.  J.  Blackburn,  L.  R.  Caldwell,  L.  W.  Chalcroft,  R.  F.  Howe,  C.  A.  Hughes, 
G.  S.  Klemmedson,  G.  W.  Schrider,  Dee  Small,  D.  E.  Warren,  M.  H.  Watson,  and  W.  W.  Wil- 
son. Recognition  is  also  due  the  farmer-cooperators  for  their  interest  and  help  in  securing  the 
data. 

2During  1920  to  1922  the  number  of  farms  in  Franklin  county  on  which  records  were  kept 
decreased  to  three. 

39 


40 


BULLETIN  No.  277 


[June, 


In  their  production  the  farms  in  Franklin  County  are  fairly  rep- 
resentative of  about  fifteen  counties  in  southern  Illinois.  Thruout  this 
area  mixed  farming  prevails,  with  no  distinct  type  predominating. 
Wheat,  hay,  dairy  products,  and  poultry  and  eggs  are  the  principal 
products  sold. 


COUNTIES  : 
1 — FRANKLIN 
2 — HANCOCK 
3— CHAMPAIGN  AND 
PIATT 

LOCATION  OF  THE  AREAS  STUDIED 
The  counties  in  which  these  data  were  se- 
cured  represent   three   of  the   major  farming- 
type  areas  of  the  state. 

The  farms  in  Hancock  county  are  fairly  representative  of  most 
of  the  area  between  the  Illinois  and  Mississippi  rivers,  extending  a^ 
far  north  as  Rock  Island  county.  This  is  the  principal  beef  cattle  and 
hog  area  of  the  state,  and  altho  some  farmers  specialize  in  grain  and 


1926}  COST  OF  FIELD  CROPS  IN  ILLINOIS  41 

hay  production,  relatively  small  amounts  of  feed  crops  are  shipped 
out.  Hogs  and  beef  cattle  are  the  chief  sources  of  income,  and  wheat, 
rye,  poultry,  and  dairy  products  the  minor  products  sold. 

_  The  farms  in  Champaign  and  Piatt  counties  are  typical  of  about 
twenty-five  counties  in  east-central  Illinois  in  which  grain  farming 
predominates,  with  general  livestock  production  occupying  a  minor 
position.  Corn  and  oats  are  the  principal  crops  grown  and  marketed, 
and  wheat  is  next  in  importance.  Relatively  few  farmers  feed  cattle 
and  hogs  to  any  extent,  and  on  most  of  the  farms  dairying  and  poultry 
raising  are  of  minor  importance. 

Farmers  who  were  sufficiently  interested  in  cost  accounting  to 
keep  daily  labor  records  for  men  and  horses,  feed  records  for  livestock, 
records  of  seed  and  of  production,  and  an  account  of  all  cash  received 
and  paid  out,  were  selected  as  cooperators.  During  the  whole  period  a 
field  man  from  the  Department  of  Farm  Organization  and  Manage- 
ment visited  each  farm  from  one  to  four  times  a  month  to  collect  these 
records  and  to  check  their  accuracy.  A  complete  double-entry  system 
of  bookkeeping,  including  68  to  100  accounts  for  each  farm,  was  kept 
by  the  Department. 

WAYS  IN  WHICH  COST  ITEMS  WERE  DETERMINED 

The  costs  of  crops  are  grouped  under  several  heads:  man  labor, 
horse  labor,  tractor,  seed,  machinery,  fuel,  twine,  threshing,  general 
farm  expense,  miscellaneous  expense,  and  interest  on  the  land. 

Man  Labor. — Each  cooperator  kept  daily  records  of  all  labor.  The  hour 
rate  was  determined  by  dividing  the  cash  cost  for  each  hired  laborer,  plus  board 
and  other  perquisites,  by  the  total  number  of  hours  worked.  A  separate  rate  was 
calculated  each  month.  Unpaid  family  labor  was  figured  at  the  average  rate  for 
hired  labor  in  the  county.  The  total  cost  of  the  man  labor  for  each  field 
was  then  determined. 

Horse  Labor. — Daily  records  were  kept  of  the  labor  performed  by  all  the 
horses  on  each  farm.  The  rate  per  hour  was  found  by  dividing  the  total  cost  of 
keeping  the  horses  by  the  total  hours  of  labor  performed.  The  cost  of  the  horse 
labor  spent  on  each  field  was  then  determined. 

Tractor. — Records  of  tractor  use  similar  to  those  of  man  and  horse  labor 
were  kept.  Depreciation  on  the  tractor,  however,  was  charged  directly  to  the 
profit  and  loss  account.  The  rate  for  tractor  use  was  calculated  on  the  basis  of 
expenses  other  than  depreciation.  It  was  decided  that  as  tractors  were  still 
somewhat  in  the  experimental  stage  in  1917  (when  the  first  cooperators  began 
using  them),  crop  costs  on  tractor  farms  would  be  more  comparable  to  those  on 
other  farms  if  the  depreciation  were  charged  as  a  loss  to  the  farm  as  a  whole 
rather  than  as  an  expense  to  the  crops  on  which  the  tractors  were  used. 

Seed. — Seed  bought  was  charged  at  its  cost.  Home-grown  seed  was  valued 
at  current  prices. 

Machinery. — Separate  accounts  were  kept  for  each  class  of  machinery.  This 
division  seemed  advisable,  since  crops  such  as  wheat  usually  require  more  expen- 
sive machinery  than  corn.  The  operations  performed  with  each  class  of 
machinery  were  listed  with  the  hours  of  horse  labor  used.  The  total  expense  of 


42  BULLETIN  No.  277  [June, 

each  class  of  machinery  was  then  prorated  to  the  fields  using  that  class,  in  pro- 
portion to  the  number  of  hours  of  horse  labor  used. 

Fuel,  Twine,  and  Threshing. — These  items  were  charged  directly  at  current 
prices  and  rates. 

General  Farm  Expense. — This  item  included  taxes,1  automobile  expense 
chargeable  to  the  farm,  fencing,  miscellaneous  labor,  tools  and  vehicles,  tele- 
phone, farm  bureau  dues,  interest  on  land  used  for  lanes,  and  other  items  that 
could  not  be  charged  directly  to  any  specific  productive  enterprise.  The  total 
was  prorated  among  the  productive  enterprises,  such  as  crops  and  productive 
livestock,  on  the  basis  of  the  man  hours  spent  on  each. 

During  1922  in  Champaign  and  Piatt  counties,  taxes  made  up  about  50 
percent  of  the  general  farm  expense,  making  that  item  greater  than  the  direct 
cost  of  man  labor  expended  on  crops. 

Miscellaneous  Expense. — Such  items  as  limestone,  phosphates,  clover 
plowed  under  for  fertilizer,  etc.,  were  included  here.  When  divided  by  the  total 
acreage  these  sums  were  so  small  that  they  were  hardly  worth  itemizing. 

Charges  for  fertilizing  materials  purchased  were  distributed  to  the  crops 
grown  on  the  fields  where  such  materials  had  been  applied.  Limestone  was 
charged  in  equal  amounts  to  the  four  succeeding  crops,  and  rock  phospate  to  the 
ten  succeeding  crops.  No  attempt  was  made  to  charge  the  crops  for  the  fertility 
they  removed  from  the  soil,  because  no  satisfactory  method  has  been  worked  out 
for  its  evaluation. 

The  labor  for  hauling  manure  was  charged  against  the  first  crop  following 
the  application,  but  no  charge  was  made  for  the  fertility  contained  in  the  manure. 

Interest  on  Land. — Five  percent  interest  on  a  conservative  market  value  of 
the  land  at  the  first  inventory  was  charged  as  an  expense  of  production.  Except 
for  improvements  this  first  valuation  was  kept  constant.  However,  where  a  com- 
parison was  made  between  individual  farms  (Table  8),  the  charge  for  land  was 
made  uniform  according  to  1913  values. 

DISTRIBUTION  OF  INCOME 

The  income  from  cereals  was  distributed  between  grain,  roughage 
(straw  or  fodder),  and  pasture.  Grain  was  credited  to  the  fields  at 
husking  or  threshing  time  at  farm  prices,  which  are  current  market 
prices  less  the  cost  of  marketing.  Roughage  value  was  estimated  on 
the  basis  of  market  prices,  or  on  the  basis  of  its  feeding  value  com- 
pared with  some  marketable  product.  Income  from  pasture  was  deter- 
mined by  multiplying  the  number  of  days  a  mature  cow  or  her  equiv- 
alent (in  terms  of  feed  consumption)  was  pastured  on  the  field,  by  the 
rate  on  permanent  pastures. 

ACCOUNTS  SUMMARIZED  IN  TERMS  OF  EFFICIENCY  FACTORS 

In  order  to  summarize  the  cost  accounts  conveniently,  a  number 
of  items  such  as  net  cost  per  bushel  or  ton,  and  man  labor  per  acre, 
have  been  grouped  as  efficiency  factors  (Table  1).  These  summarized 
items,  which  serve  as  measures  of  the  efficiency  of  production,  are  self- 
explanatory,  with  the  possible  exception  of  the  net  cost  per  bushel  or 

'Some  farm  accountants  are  distributing  taxes  directly  to  the  land,  live- 
stock, etc.,  a  practice  which  is  now  being  used  in  farm  accounting  investigations 
by  this  department. 


1926}  COST  OF  FIELD  CROPS  IN  ILLINOIS  43 

per  ton,  which  was  obtained  by  subtracting  from  the  total  expense  per 
acre  the  income  other  than  from  grain  in  the  case  of  cereals  or  other 
than  from  roughage  in  the  case  of  hay.  The  remainder  is  the  net 
expense  of  producing  grain  alone  or  hay  alone. 


CROP  COSTS  SUMMARIZED  BY  AREAS 

FRANKLIN  COUNTY 

Clover  is  the  outstanding  crop  in  Franklin  county  for  the  ten-year 
period  in  net  profits  per  acre  (Table  1  and  Fig.  1).  This  result,  how- 
ever, is  the  average  of  the  clover  crops  where  fairly  satisfactory  stands 
were  secured  that  were  worth  leaving  over  for  hay.  Expenses  incurred 
on  clover  crops  which  failed  were  charged  directly  to  the  profit  and 
loss  account.  The  results  would  be  still  more  striking  for  clover  if  the 
crop  had  been  credited  at  commercial  rates  for  nitrogenous  fertilizers 
with  the  nitrogen  added  to  the  soil.  But  considering  only  fertilizers 
actually  purchased,  clover  still  leads  all  other  crops  in  net  profit  per 
acre  by  a  margin  of  nearly  $7.  Limestone  was  needed  in  every  case  to 
get  a  satisfactory  stand  of  clover,  and  made  up  a  large  part  of  the 
miscellaneous  expense. 

Next  to  clover  in  net  profit  per  acre  is  mixed  hay.  The  operating 
expense  for  this  crop  was  $3  less  an  acre  than  for  clover,  making  pos- 
sible a  wide  margin  ($7.39)  between  the  cost  of  production  and  selling 
price.  The  general  practice  in  Franklin  county  of  leaving  over  a  good 
stand  of  clover  mixed  with  timothy  for  another  year  seems  to  be  well 
justified  on  the  basis  of  these  studies. 

Of  the  forage  crops,  timothy  comes  next  to  mixed  hay  with  a  net 
profit  of  $5.22  an  acre,  and  redtop  follows  with  a  net  profit  of  $3.80 
an  acre.  Neither  of  these  crops  can  compete  with  clover  on  limed 
soils,  but  on  soils  which  are  not  limed  they  undoubtedly  have  a  place 
in  the  rotation.  When  grown  for  feed  for  young  stock  on  the  farm, 
however,  they  may  have  less  value  compared  with  clover  than  the 
prices  used  here  indicate.  Market  prices  do  not  necessarily  represent 
correct  nutritive  values  of  feeds  for  young  stock.  Most  of  the  timothy 
hay  sold  is  later  fed  to  mature  work  stock  which  does  not  require  a 
high  proportion  of  protein.  Protein,  which  is  essential  for  growth,  is 
furnished  much  more  abundantly  in  clover  hay  than  in  timothy  or 
redtop. 

The  cost  records  on  cowpeas  do  not  cover  a  large  enough  acreage 
to  justify  definite  conclusions  as  to  their  place  in  the  cropping  system 
in  Franklin  county.  The  results  here  show  a  loss  of  $1.14  an  acre. 
As  hay  crops  they  cannot  compete  with  clover  on  limed  soils,  since  the 
cost  per  acre  is  approximately  60  percent  greater  and  the  yield  is 
lower.  Where  clover  has  failed,  however,  they  may  be  used  as  a  sub- 
stitute crop,  since  they  produce  forage  high  in  protein.  Since  cowpeas 


44 


BULLETIN  No.  277 


[June, 


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COST  OF  FIELD  CROPS  IN  ILLINOIS 


45 


frequently  serve  as  a  substitute  crop  when  other  crops  fail,  it  is  prob- 
able that  they  were  not  grown  under  the  most  favorable  circumstances 
to  show  a  profit. 

Wheat,  with  a  profit  of  $5.58  an  acre,  is  the  only  cereal  to  show  a 
profit  for  the  ten-year  period  in  this  county.  Corn  for  grain  shows  a 
loss  of  4  cents  an  acre,  and  oats  a  loss  of  46  cents.  Corn  put  into  the 
silo  can  of  course  be  utilized  more  fully  than  when  grown  for  grain.  This 


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FIG.  1. — COST  OF  PRODUCING  CROPS  IN  FRANKLIN  COUNTY  DURING 

TEN -YEAR  PERIOD  1913-1922 

In  this  county  clover  led  all  crops  in  net  profit  per  acre  during  this 
period.  Mixed  hay,  wheat,  timothy,  and  redtop  also  proved  profitable.  (In 
this  and  the  following  graphs,  the  various  expenses  and  any  profit  are  repre- 
sented in  the  left-hand  column,  and  the  income  from  various  sources  and 
an}r  loss  are  shown  in  the  right-hand  column — all  expressed  in  dollars  per  acre.) 

additional  value  has  not  been  shown  in  the  field  accounts,  since  silage 
prices  are  not  quoted  on  the  markets.  Corn  going  into  the  silo  has 
been  credited  on  the  basis  of  grain  only  and  not  according  to  the  feed- 
ing value  of  the  silage.  Then,  too,  it  is  the  only  cultivated  (inter- 
tilled) crop,  that  has  been  grown  to  any  extent  in  Franklin  county. 
The  necessity  of  having  a  cultivated  crop  to  help  control  weeds  and 
the  need  for  a  silage  crop  where  dairying  is  becoming  more  important 
will  probably  keep  corn  in  the  rotation. 

HANCOCK  COUNTY 

Alfalfa  leads  all  crops  in  net  profit  per  acre  in  Hancock  county. 
Clover  is  second  only  to  alfalfa  in  net  profit  per  acre  (Table  2  and 
Fig.  2).  However,  this  result  is  the  average  of  the  clover  crops  where 
fairly  satisfactory  stands  were  secured  that  were  worth  leaving  over 
for  hay  or  seed.  Only  a  part  of  the  land  seeded  to  clover  received  an 
application  of  limestone,  which  not  only  helped  in  securing  a  stand, 
but  added  to  the  production  per  acre.  Under  these  conditions,  as  in 


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46 


BULLETIN  No.  277 


[June, 


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1926] 


COST  OF  FIELD  CROPS  IN  ILLINOIS 


Franklin  county,  clover  proves  its  value  in  the  rotation  entirely  aside 
from  its  merits  as  a  soil  builder.  Considerable  increase  in  the  acreage 
of  alfalfa  and  clover  is  certainly  justified  on  the  basis  of  these  records. 
Timothy  shows  a  higher  net  profit  than  mixed  hay;  however, 
mixed  hay  leads  when  the  relative  value  of  these  two  crops  is  consid- 
ered as  feed  for  growing  livestock  on  the  farm. 


CLOVtO.         AtfALf ft          TIMOTHY      MIXtD  HM 


SB/fan  Ldbor 


^Interest  on  Land  ^Other  Expenses 

FIG.  2. — COST  OF  PRODUCING  CROPS  IN  HANCOCK  COUNTY  DURING 

TEN-YEAR  PERIOD  1913-1922 

In  Hancock  county  all  crops  returned  some  profit  during  this 
period.  Alfalfa,  clover,  corn,  and  wheat  were  the  more  profitable 
crops. 


Corn  leads  all  cereals,  and  is  next  to  clover  with  a  net  profit  per 
acre  of  $8.59.  Wheat  comes  second  with  $5.44  net  profit  per  acre,  and 
rye  third  with  $4.88.  Since  wheat  and  rye  require  labor  at  practically 
the  same  time  of  the  year,  wheat  is  usually  grown  on  the  more  fertile 
soil,  and  rye  on  the  poorer  soil. 

Oats,  as  a  crop  by  itself,  is  the  least  profitable  of  the  cereals.  In 
combination  with  other  crops,  however,  it  occupies  a  place  which  is 
difficult  to  fill  with  any  other  crop.  The  labor  on  oats  interferes  very 
little  with  corn  or  wheat,  the  crop  occupies  the  ground  for  a  shorter 
time  than  these  grains,  and  is  a  good  nurse  crop  for  the  seeding  of 
clover  or  alfalfa.  Oats  are  usually  sown  on  land  that  has  grown  two 
or  more  cereal  crops  since  a  legume,  and  consequently  do  not  have  as 
good  an  opportunity  of  returning  a  profit  as  corn,  which  is  usually 
grown  on  the  most  fertile  land.  Oats  cannot  be  put  on  very  fertile 
land  because  of  the  danger  of  lodging,  but  coming  the  third  year  fol- 
lowing a  legume  oats  probably  would  give  a  net  return  comparable  to 
that  secured  from  a  third  year  of  corn. 


48 


BULLETIN  No.  277 


[June, 


COSTS  IN  FRANKLIN  AND  HANCOCK  COUNTIES  COMPARED 

A  study  of  average  net  costs  of  various  crops  for  the  ten-year 
period  in  Franklin  and  Hancock  counties  shows  that  each  area  has 
special  conditions  which  favor  the  production  of  certain  crops.  For 
convenience  the  net  costs  per  bushel  or  per  ton  given  in  Tables  1  and  2 
are  repeated  here. 


Franklin  Co.  Corn 

1913-22 $.90 

Hancock  Co. 

1913-22 $.50 


Mixed      Red-  Cow- 
Wheat     Oats     Clover  Alfalfa  Timothy    hay        top  peas  Rye 
$1.25    $.60       $7.44     $6.27     $6.90     $5.54  $22.05       

$1.08    $.40       $6.04    $7.96    $8.82     $11.18   ..  $.84 


Of  the  five  main  crops  grown  in  the  two  counties — corn,  wheat, 
oats,  clover,  and  timothy — the  farms  in  Hancock  county  produce  all 
but  timothy  at  a  lower  net  cost  than  the  farms  in  Franklin  county. 


TABLE  3. — SUMMARY  OF  COST  ACCOUNTS  ON  CROPS,  CHAMPAIGN  AND  PIATT 
COUNTIES,  1920-1922 


Corn 

Wheat 

Oats 

Clover 

Soybeans 

1922 

Expenses  per  acre 
Man  labor  

$  4.30 

$  2.85 

$  1.67 

$  1.56 

$  2  69 

Horse  labor  

5.65 

4.06 

2.05 

1.34 

5  10 

Tractor  labor  

.79 

.84 

.29 

46 

Seed  

.31 

2.18 

1.44 

2.37 

1.85 

Machinery  

.90 

1.33 

.54 

.72 

1.06 

.30 

.28 

.31 

Fuel               

.12 

.11 

22 

Threshing  or  hulling  

1.02 

.95 

.83 

1  10 

General  farm  expense  

4.58 

3.38 

2.22 

1.91 

3.66 

Miscellaneous  

.18 

.05 

.01 

Total  operating  expense  

16.71 

16.13 

9.56 

8.73 

16  45 

Interest  on  land  at  5%  

12.88 

12.40 

12.74 

11.82 

12.59 

Total  expense  

$29.59 

$28.53 

$22.30 

$20.55 

$29  04 

Income  per  acre 
Grain  or  seed  

$22.31 

$26.68 

$13.95 

$  4.90 

$17.64 

Roughage  

.12 

2.33 

2.39 

11.33 

5.58 

Pasture  

.85 

.84 

.72 

2.40 

1.14 

Total  income  

23  28 

29  85 

17  06 

18  63 

24  36 

Net  profits  per  acre  

$-6  31 

$  1  32 

$—5  24 

$  —  1  92 

$—4  68 

Efficiency  factors 
Net  cost  per  bu.  or  ton  .... 
Price  per  bu.  or  ton  

$     .60 
.45 

$  1.31 

1  22 

$     .61 
38 

$14.90 
12  20 

$  1.89 
1  15 

Net  profit  per  bu.  or  ton  .  . 
Yield  

-.13 

49  2  bu. 

.06 
21  8  bu. 

-.14 

36  7  bu. 

89  ton 

-.30 
15  3  bu 

Man  labor  per  acre  

14  4hrs. 

12.0  hrs. 

6  7  hrs. 

6  1  hrs. 

13  9  hrs 

Horse  labor  per  acre  

33  5  hrs. 

25  1  hrs. 

11  9  hrs 

8  2  hrs 

31  4  hrs 

Tractor  use  per  acre  
Man  labor  per  bu.  or  ton  .  . 

.7hr. 
.29hr. 

.49hr. 
.55hr. 

.23hr. 
.  18  hr. 

.72hr. 
.91hr. 

Total  number  of  acres  

2  838  95 

649  06 

1  995  81 

448  00 

182  89 

Hancock  county  price, 
1913-22  

$     .70 

$  1.33 

$     .47 

$13.30 

1926] 


COST  OF  FIELD  CROPS  IN  ILLINOIS 


49 


On  crops  requiring  little  labor  Franklin  county  has  low  costs  per  acre 
mainly  because  of  the  low  land  charges;  hence  the  amount  raised 
does  not  need  to  be  large  to  show  a  fair  return.  Of  the  minor  crops, 
the  farms  in  Franklin  county  produce  mixed  hay  at  a  lower  cost  than 
the  farms  in  Hancock  county.  Because  of  soil  and  climatic  conditions, 
Hancock  county  has  the  greater  advantages  in  the  production  of  corn 
and  oats.  During  the  1913-22  period  the  Hancock  county  farms  pro- 
duced corn  at  a  cost  of  40  cents  less  a  bushel,  and  oats  at  a  cost  of  20 
cents  less  a  bushel  than  the  Franklin  county  farms. 

The  advantage  of  wheat  over  corn  and  oats  in  Franklin  county  is 
shown  clearly  by  a  comparison  of  the  net  costs  of  production.  The  net 
cost  of  producing  one  bushel  of  wheat  is  $1.25  compared  with  90  cents 


COttN  WHEAT  OATS  CtOVSB 

KB  Man  Labor  ^  Grain  or  Seed 


U/nterest  on  Land        VZ&Oiher  Expenses 

FIG.  3. — COST  OF  PRODUCING  CROPS  IN  CHAM- 
PAIGN AND  PIATT  COUNTIES  DURING 

1920-1922 

In  this  area  and  during  these  three  years 
wheat  was  the  only  crop  returning  a  profit. 
Unbalanced  price  relationships  and  high  land 
charges  were  responsible  for  this  fact. 


for  one  bushel  of  corn.  Average  farm  prices  in  Franklin  county  at  har- 
vest and  husking  time  were  $1.66  for  wheat  and  90  cents  for  corn. 
Expressed  in  percentages,  corn  costs  72  percent  as  much  to  produce  as 
wheat,  altho  the  price  is  only  54  percent  as  high,  and  oats  cost  48  per- 
cent as  much  to  produce  as  wheat,  with  the  price  only  35  percent 
as  high. 

On  the  farms  in  Hancock  county  corn  is  slightly  more  profitable 
than  wheat,  costing  only  46  percent  as  much  to  produce  as  wheat, 
while  the  price  of  corn  is  52.5  percent  as  high  as  wheat.  Oats  cost  37 
percent  as  much  to  produce  as  wheat  and  the  price  of  oats  is  35.3 
percent  as  high  as  wheat. 


50  BULLETIN  No.  277  [June, 

From  these  relative  costs  of  producing  crops  one  may  conclude  that 
in  Franklin  county  wheat  and  clover  should  form  important  parts  of  a 
profitable  rotation  on  limed  soils.  On  unlimed  soils  wheat  and  timo- 
thy or  redtop  should  make  up  important  parts  of  the  rotation.  The 
limited  cost  records  available  on  soybeans  indicate  that  they  may 
replace  part  of  the  corn  to  meet  the  need  for  a  cultivated  (intertilled) 
crop  or  may  replace  oats  in  the  rotation.  They  are  especially  valuable 
as  a  hay  crop  when  clover  fails  to  grow. 

In  Hancock  county  corn,  clover,  and  alfalfa  have  the  advantage 
of  low  production  costs.  Wheat  or  oats,  or  both,  are  needed  in  the 
rotation  to  serve  as  nurse  crops  for  clover. 

|  CHAMPAIGN  AND  PIATT  COUNTIES 

Wheat  is  the  only  crop  that  shows  a  net  profit  for  1920-22  in 
Champaign  and  Piatt  counties.  If  the  price  of  corn  had  been  in  its 
usual  ratio  to  wheat,  profits  on  corn  would  have  been  slightly  greater 
than  those  on  wheat.  Corn  and  wheat  cost  almost  the  same  per  acre 
to  produce  when  wheat  follows  oats  in  the  rotation,  as  it  did  in  prac- 
tically all  cases  here.  The  cost  of  producing  an  acre  of  soybeans  for 
the  year  1922  fell  between  the  cost  of  corn  and  that  of  wheat  for  the 
period,  and  was  a  little  higher  than  that  of  corn  ($28.39)  and  wheat 
($27.93)  for  1922. 

The  high  interest  charge  on  land  in  this  area  in  1920-22  causes 
those  crops  which  bring  in  low  incomes  per  acre  and  which  therefore 
have  to  depend  for  profits  mainly  upon  low  expenses,  to  show  up  at  a 
disadvantage.  Oats,  especially,  belong  to  this  class.  Clover  fails  to 
show  a  profit  mainly  because  of  low  yields,  which  were  much  below 
the  possibilities  in  this  area,  especially  on  soil  where  limestone  has 
been  properly  applied. 

It  is  believed  that,  on  an  average,  the  expenses  of  production  on 
the  various  crops  shown  in  Table  3  will  remain  in  about  the  same 
ratio  to  each  other  over  a  number  of  years  or  as  long  as  the  same  cul- 
tural practices  are  followed.  Neither  the  crop  yields  nor  the  prices  for 
the  three  years  1920-22  are  representative,  however,  of  a  long-time 
average,  and  anyone  using  Table  3  to  determine  which  rotation  will 
bring  the  largest  net  income,  must  estimate  his  own  expected  income 
per  acre  from  each  of  these  crops. 

A  change  in  cultural  practice,  such  as  drilling  wheat  in  soybean 
stubble  with  no  extra  soil  preparation,  reduces  the  man  labor,  machin- 
ery expense,  and  general  farm  expense  on  wheat  about  one-half,  and 
the  horse  and  tractor  costs  about  two-thirds.  On  this  basis,  the 
expenses  of  producing  an  acre  of  wheat  (Table  3)  would  be  reduced 
by  about  $7,  under  present  conditions.  The  effect  of  this  practice  on 
wheat  yields  has  varied  so  widely  on  different  fields  that  no  genera] 
recommendation  about  the  practice  is  offered  at  this  time. 


1926]  COST  OF  FIELD  CROPS  IN  ILLINOIS  51 

PROFITABLE  CROP  ROTATIONS 

The  purpose  of  cost-of-production  studies  is  primarily  to  find  out 
how  farms  may  be  made  more  profitable.  This  may  be  accomplished 
thru  the  selection  of  those  crops  and  livestock  enterprises  which,  when 
combined,  will  give  large  returns  and  provide  for  efficient  operation. 

The  data  already  presented  show  the  relative  profitableness  of 
different  crops,  based  on  the  farm  practices  in  the  regions  studied.  On 
the  farms  studied  no  complete  plan  of  soil  improvement  had  been 
carried  out  for  all  fields.  Better  soil  treatment,  improved  methods  of 
production,  and  the  selection  of  high-yielding  varieties  might  have 
added  more  to  the  profits  of  some  crops.  Such  improved  practices 
over  a  period  of  time  may  affect  also  the  relative  profitableness  of 
crops  in  an  area. 

The  data  presented  here  provide  only  part  of  the  information 
needed  in  combining  different  crops  in  a  rotation  in  such  a  way  as  to 
give  the  maximum  net  return  to  the  farmer.  Other  factors,  such  as 
probable  price;  control  of  weeds,  plant  diseases,  and  insects;  risk  of 
crop  failure;  the  sequence  of  crops;  feed  requirements  of  livestock; 
the  physical  layout  of  the  farm;  the  available  supply  of  labor;  and 
the  yields  that  may  be  obtained  with  various  crop  rotations,  must  be 
considered  in  selecting  the  most  profitable  crop  rotation. 

Profitable  Combinations  /or  Franklin  County  Area 

Crop  rotations  have  not  been  so  well  standardized  for  the  mixed- 
farming  area  of  southern  Illinois  as  for  the  areas  that  are  commonly 
included  in  the  corn  belt.  However,  the  foregoing  data  showing  the 
costs  of  production  and  incomes  from  various  crops,  and  their  com- 
parative values  in  a  general  cropping  system,  furnish  a  basis  for  deter- 
mining profitable  combinations  of  crops  for  this  area.  Wheat  and 
clover — the  crops  which  in  this  study  returned  the  greatest  profits — 
should  make  up  the  major  part  of  the  rotation.  Corn,  altho  produced 
at  a  slight  loss,  fills  a  needed  place  as  an  inter-tilled  crop  and  provides 
necessary  feed.  Where  hay  is  desired  as  a  cash  crop,  timothy  or  red- 
top  may  be  added.  These  crops  may  be  combined  into  four-  or  five- 
year  rotations. 

FOUR- YEAR  ROTATIONS 

(1)  First  Year— Corn 

Second  year — Wheat  (with  clover) 

Third  year — Clover 

Fourth  year — Wheat  (with  clover  or  clover  and  grass) 

(2)  First  year — Corn 

Second  year — Wheat  (with  clover  and  grass) 

Third  year — Clover  and  grass 

Fourth  year — Grass  (timothy  or  redtop) 


52  BULLETIN  No.  277  [June, 

FIVE-YEAR  ROTATIONS 

(1)  First  Year — Corn 

Second  year — Wheat  (with  clover  and  grass,  or  clover) 
Third  year — Clover,  or  clover  and  grass 
Fourth  year — Wheat  (with  clover) 
Fifth  year — Clover 

(2)  First  year — Corn 

Second  year — Wheat  (with  clover  and  grass) 
Third  year — Clover  and  grass 
Fourth  year — Grass  (timothy  or  redtop) 
Fifth  year — Grass  (timothy  or  redtop) 

Of  the  four-year  rotations,  the  first  would  be  somewhat  more 
profitable  but  has  the  disadvantage  of  a  peak  of  labor  requirements 
during  the  period  of  ground  preparation  and  wheat  seeding.  The  five- 
year  rotations  differ  from  the  corresponding  four-year  rotations  in 
that  the  clover  or  grass  seeding  is  let  stand  the  fifth  year.  In  the  first 
of  the  five-year  rotations  red  clover  may  be  sown  with  the  second 
crop  of  wheat  if  hay  is  desired,  or  sweet  clover  may  be  used  to  furnish 
pasture.  Altho  this  rotation  requires  more  labor  than  the  second  five- 
year  rotation,  it  includes  a  larger  proportion  both  of  the  maximum- 
profit  crops  and  of  legume  crops. 

On  some  of  the  farms  included  in  this  study,  limestone  had  not 
been  applied  and  clover  could  not  be  grown.  These  are  representative 
of  a  considerable  number  of  farms  in  this  area  which,  because  of  initial 
cost  or  long  distances  from  shipping  points,  have  not  applied  lime- 
stone. On  such  farms  crop  yields  are  limited  to  the  amounts  which 
can^  be  grown  by  returning  the  crop  wastes  or  the  manure  which  is 
secured  from  feeding  the  crops. 

The  influence  of  the  application  of  limestone  and  the  growing  of 
legumes  on  the  yield  of  grain  crops  in  this  area  is  well  illustrated  by 
the  results  secured  by  the  Agronomy  Department  of  this  Station  on 
the  Ewing  soil  experiment  field  in  Franklin  county.  In  a  rotation  of 
corn,  oats,  clover,  and  wheat  the  average  yields  of  corn  for  the  ten- 
year  period  covered  by  this  study  afford  a  striking  comparison  of  re- 
sults secured  when  soil  treatment  is  limited  to  crop  residues  or  manure, 
with  those  secured  with  the  same  materials  when  limestone  has  been 

applied. 

Average  yield  of  corn  (bushels) 
Soil  treatment  1913-19221 

Crop  residues 11.3 

Manure 202 

Crop  residues  and  limestone 27.9 

Manure  and  limestone 34.2 

Other  grain  crops  gave  comparable  increases  when  limestone  was 
applied.  Upon  this  basis  the  expenditure  of  money  and  labor  in  apply- 

*Data  furnished  by  Agronomy  Department. 


1926}  COST  OF  FIELD  CROPS  IN  ILLINOIS  53 

ing  limestone  would  greatly  increase  the  profitableness  of  rotations  in 
this  area  by  making  possible  the  growing  of  clover — the  maximum- 
profit  crop — as  well  as  by  increasing  the  yields  of  other  crops. 

Until  such  time  as  the  available  capital  and  labor  make  possible 
the  more  general  application  of  limestone,  a  rotation  of  corn,  wheat 
(with  timothy),  timothy,  and  timothy  seems  best  adapted  to  unlimed 
soils.  Redtop,  altho  less  profitable,  may  be  used  in  place  of  timothy. 

The  acreage  of  cowpeas  and  soybeans  included  in  the  cost  studies 
of  this  area  is  too  limited  to  justify  definite  conclusions  as  to  the  place 
of  these  crops  in  a  profitable  cropping  system. 

Profitable  Combinations  for  Hancock  County  Area  and 

Champaign  and  Piatt  County  Area 

A  number  of  rotations  have  been  suggested  by  the  Agronomy 
Department  of  this  Station  as  suited  to  a  program  of  permanent  soil 
improvement  for  the  corn  belt.  These  are  published  in  Soil  Reports 
19  to  30  of  this  Station.  From  these  rotations  the  following  would  be 
selected,  on  the  basis  of  these  cost  studies,  as  particularly  desirable 
for  the  Hancock  area  and  the  Champaign  and  Piatt  county  area. 

FOUR- YEAR  ROTATIONS 

(1)  First  Year— Cora 

Second  year — Oats  (with  clover) 

Third  year — Clover 

Fourth  year — Wheat  (with  sweet  clover) 

(2)  First  year — Corn 
Second  year — Corn 

Third  year — Oats  (with  clover) 
Fourth  year — Clover 

FIVE-YEAR  ROTATION 
First  Year — Corn 
Second  year — Corn 

Third  year — Oats    (with  clover  or  clover  and  grass) 
Fourth  year — Clover  or  clover  and  grass 
Fifth  year — Wheat  (with  sweet  clover) 

These  rotations  are  built  around  corn  or  corn  and  wheat  as  grain 
crops,  with  clover  as  the  legume.  With  each  of  these  rotations  a  large 
proportion  of  the  land  is  devoted  to  highly  profitable  crops. 

Since  this  study  includes  only  one  year's  record  for  soybeans,  no 
attempt  is  made  to  determine  their  place  in  profitable  cropping  sys- 
tems for  these  areas. 

Alfalfa  seeded  on  well-prepared  land,  according  to  the  results  se- 
cured in  these  cost  studies,  should  increase  the  profitableness  of  any 
cropping  system.  Because  of  the  conflict  of  labor  demands  in  hay- 
making with  those  of  corn  cultivation,  and  the  large  total  tonnage  of 
hay  secured  from  a  large  field  of  alfalfa,  many  farmers  prefer  to  grow 
this  crop  in  a  smaller  field  outside  the  rotation  rather  than  to  make 


54  BULLETIN  No.  277  [June, 

it  a  part  of  the  rotation.  When  added  to  a  four-  or  five-year  rotation, 
alfalfa  may  be  grown  on  one  field  while  the  other  crops  rotate  once 
around;  when  the  rotation  period  has  been  completed,  the  alfalfa  is 
moved  to  another  field. 

CROP  COSTS  SUMMARIZED  BY  PERIODS 

The  ten-year  period,  1913-1922,  may  be  logically  divided  into  three 
shorter  periods  based  upon  marked  price  changes.  The  first  period, 
1913-16  inclusive,  may  be  called  the  pre-war  period;  the  second 
period,  1917-19  inclusive,  the  war  period;  and  the  third  period,  1920-22 
inclusive,  the  post-war  period. 

Thruout  the  pre-war  period  the  farm  prices  of  crops,  except  wheat, 
remained  at  nearly  the  same  level.  Wheat  prices  rose  approximately 
25  cents  a  bushel  in  1915  and  again  in  1916.  Operating  expenses  on 
farms  remained  about  the  same  during  these  four  years. 

The  war  period  brought  a  large  and  rapid  increase  in  the  prices  of 
grains.  The  price  of  wheat  more  than  doubled  and  the  price  of  other 
crops  increased  from  50  to  100  percent.  Tho  operating  expenses  in- 
creased steadily,  they  lagged  two  to  three  years  behind  the  increases 
in  prices  of  crops,  and  the  immediate  effect  of  these  changes  was  to 
make  all  grain  production  profitable,  especially  wheat,  which  enjoyed 
the  greatest  increase  in  price.  Those  who  quickly  increased  their  wheat 
acreage,  increased  their  profits  accordingly.  In  so  far,  then,  as  price 
increases  can  be  foreseen,  a  farmer  will  increase  the  acreages  of  those 
crops  which  are  in  demand. 

The  post-war  period  was  marked  by  a  sudden  drop  in  prices  in 
the  closing  months  of  1920.  At  threshing  time  the  prices  of  wheat  and 
oats  were  still  high.  By  the  time  corn  was  husked  its  price  was  less 
than  one-half  that  of  1919.  The  price  decline  affected  small  grains 
correspondingly  in  1921  and  1922.  Corn  fell  to  the  low  level  of  32  cents 
a  bushel  at  husking  time  in  1921,  but  recovered  somewhat  by  1922. 
The  decline  in  operating  expenses  lagged  behind  that  of  prices  and  had 
little  effect  on  the  1920  crops,  In  1921  and  1922  the  decline  in  operat- 
ing expenses  was  less  abrupt  than  the  earlier  drop  in  prices,  and  for 
this  period  operating  expenses  stood  about  50  percent  above  the  pre- 
war period.  The  relation  of  grain  prices  and  cost  of  production  made 
this  period  one  of  small  profits  or  of  actual  losses. 

When,  for  a  particular  crop,  a  decline  in  prices  seems  certain, 
especially  when  production  costs  are  high,  the  individual  farmer  may 
shift  production,  so  as  to  produce  less  of  that  crop  and  more  of  a  more 
profitable  crop.  If,  however,  as  more  commonly  happens,  the  drop  in 
prices  of  farm  crops  is  general,  the  best  thing  for  him  to  do  is  to  reduce 
cash  expenditures  as  far  as  possible,  and  get  the  largest  possible  re- 
turns from  his  own  labor  and  that  of  his  family  and  from  the  equip- 
ment he  already  has  on  hand. 


19261 


COST  OF  FIELD  CROPS  IN  ILLINOIS 


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56 


BULLETIN  No.  277 


[June, 


COST  OF  CORN  DURING  DIFFERENT  PERIODS 

Corn  was  considerably  more  profitable  in  Franklin  county  during 
the  war  period  than  before  or  after  that  time  (Table  4  and  Fig.  4). 
During  the  pre-war  period  the  net  loss  per  acre  was  $3.96;  during  the 
war  period  there  was  a  profit  of  $8.10;  and  during  the  post-war  period 
a  loss  of  $12.74.  The  total  income  per  acre  during  the  war  period 
increased  165  percent  over  that  of  the  first  period.  This  was  due  both 
to  more  favorable  seasons  for  corn,  which  resulted  in  an  increase  in 
average  yields  from  16.9  to  28.9  bushels,  and  to  the  higher  price  level 
which  prevailed. 


,-J  1913- 1  fo  1917-19  I9ZO-IZ 

FB.ANKUM      COUNTV 


I9TO-27 

C,H*«PAiG,rt  M4D 
1»l«TTCOumilS 


\Man  Ldbor 


IZHoss 
^Interest  on  Land. 

Fia.  4. — COST  OF  PRODUCING  CORN  DURING  PRE-WAR,  WAR, 

AND  POST-WAR  PERIODS 

During  the  war  period  favorable  seasons  and  high  prices  com- 
bined to  make  corn  profitable.  High  operating  expenses  and  low 
prices  resulted  in  a  loss  in  the  last  period. 

The  income  during  the  last  period  dropped  to  28  percent  above 
that  of  the  pre-war  period.  However,  operating  expenses  on  corn  in 
Franklin  county  increased  steadily  or,  expressing  the  increase  in  per- 
centages of  the  first  period,  52  percent  in  the  second,  and  90  percent  in 
the  third.  The  net  profit  per  acre  on  corn  in  Hancock  county  during 
the  first  two  periods  was  $1.97  and  $24.02  respectively;  this  was 
changed  to  a  loss  of  32  cents  an  acre  in  the  third  period  (Table  4).  The 
gross  income  was  influenced  by  wide  differences  in  average  yields,  as 
well  as  by  price  levels.  The  yields  averaged  36.1,  42.2,  and  52.2 
bushels  during  the  three  periods. 


1926]  COST  OF  FIELD  CROPS  IN  ILLINOIS  57 

Climatic  conditions,  and  in  the  last  period,  improved  farm  prac- 
tices on  some  of  the  farms,  such  as  plowing  under  sweet  clover  catch 
crops,  accounted  for  the  above  differences  in  yield.  Operating  expenses, 
however,  increased  steadily;  expressed  in  percentages  of  the  first  period, 
these  increases  amounted  to  30  percent  in  the  second  period  and  48  per- 
cent in  the  third.  Tractors  were  introduced  on  some  farms  in  the  second 
and  third  periods,  influencing  the  amount  of  horse  labor  used  and  the 
total  power  cost.  The  charge  for  interest  on  land  showed  a  marked 
increase  in  the  last  period  due  to  the  fact  that  some  new  farms  with 
higher  land  values  were  included  in  the  cost  accounting  studies.  At 
that  time  an  acre  of  Hancock  county  land  was  valued  at  $50  to  $150 
higher  than  it  was  during  the  pre-war  period. 

The  net  loss  per  acre  on  corn  in  Champaign  and  Piatt  counties 
during  the  1920-22  period  was  $6.31,  as  compared  with  a  loss  of  32 
cents  in  Hancock  county,  which  has  similar  conditions  of  climate  and  a 
soil  of  lighter  texture.  The  smaller  total  income  per  acre  in  Champaign 
and  Piatt  counties  was  due  primarily  to  a  lower  yield,  a  somewhat 
lower  price,  and  less  credit  for  by-products.  Altho  operating  expenses 
were  less,  the  total  expense  on  corn  in  Champaign  and  Piatt  counties 
was  higher  than  in  Hancock  county  due  to  the  higher  charge  for  inter- 
est on  land.  Land  in  Champaign  and  Piatt  counties  generally  sells  at 
a  higher  price  than  in  Hancock  county;  moreover,  the  records  on  these 
farms  were  started  in  March,  1920,  when  land  prices  were  near  the 
peak  for  the  entire  period  covered  by  this  study.  Average  values  of 
about  $250  an  acre  seemed  to  be  conservative  at  that  time. 

COST  OF  WHEAT  DURING  DIFFERENT  PERIODS 

Wheat  in  Franklin  county  paid  better  than  corn  during  all  three 
periods  (Table  5  and  Fig.  5).  In  the  first  period  the  net  loss  was  $2.57 
per  acre;  in  the  second  this  was  changed  to  a  profit  of  $17.15; 
and  a  loss  of  $4.93  occurred  in  the  third.  The  large  profit  of  the  war 
period  was  due  to  favorable  seasons  with  good  yields  and  to  high  grain 
prices.  The  increasing  rates  of  man  and  horse  labor,  some  tractor 
expense,  and  considerable  increases  from  period  to  period  in  miscel- 
laneous expenses,  which  on  these  farms  were  made  up  mainly  of  pur- 
chased fertilizers,  increased  operating  expenses  constantly,  altho  the 
amounts  of  man  and  horse  labor  were  materially  reduced  in  the 
last  period. 

During  the  first  period  in  Hancock  county  the  net  loss  per  acre  on 
wheat  was  $5.95  (Table  5).  Favorable  seasons  and  prices  combined 
to  return  a  net  profit  of  $26.65  in  the  second  period;  the  third  period, 
due  to  reduced  yields  and  prices,  gave  a  profit  of  only  $2.79.  Except 
for  the  use  of  purchased  fertilizers,  the  conditions  influencing  operating 
costs  were  similar  to  those  in  Franklin  county.  During  the  second  and 
third  periods,  records  were  started  on  several  new  farms,  whose  land 


58 


BULLETIN  No.  277 


[June, 


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1926} 


COST  OF  FIELD  CROPS  IN  ILLINOIS 


59 


values  were  influenced  by  the  increasing  market  prices  from  1917  to 
1920.  The  increase  in  the  charge  for  land  on  these  farms  raised  the 
average  for  the  whole  group. 

The  total  income  for  wheat  in  Champaign  and  Piatt  counties  in 
the  post-war  period  was  approximately  the  same  as  that  in  Hancock 
county  (Table  5).  Operating  expenses  were  lower,  due  to  the  use  of 


1914-lfc  1918-19  I92O-ZT 

HANOOCK.  COUNTY 


I9ZO  -ZZ. 

A/ID 
PIATT  COUNTltS 


J8&  Man  Labor 


Interest  on  Land 


EM  Pasture 


FIG.  5. — COST  OF  PRODUCING  WHEAT  DURING  PRE-WAR,  WAR, 

AND  POST-WAR  PERIODS 

Wheat  changed  from  a  non-profit  crop  in  the  pre-war  period  to 
a  very  profitable  crop  during  the  war  period.  In  the  post-war  period 
wheat  was  more  profitable  than  corn  in  all  areas. 


less  man  labor  and  power.  The  higher  charge  for  interest  on  land 
raised  the  total  expense  nearly  two  dollars  an  acre  above  that  of  Han- 
cock county,  and  reduced  the  net  profit  per  acre  to  $1.32. 

COST  OF  OATS  DURING  DIFFERENT  PERIODS 

Oats  in  Franklin  county  have  a  relatively  higher  price  than  in  the 
other  two  areas,  due  partly  to  the  fact  that  oats  are  frequently  bought 
in  Franklin  county  and  so  are  given  a  price  to  cover  the  cost  of  ship- 
ping them  in  and  hauling  them  to  the  farm.  With  this  higher  price, 
oats  were  grown  at  a  loss  of  $3.38  per  acre  in  the  first  period,  a  net 
profit  of  $3.55  in  the  second,  and  a  loss  of  $1.92  in  the  third  (Table  6 


60 


BULLETIN  No.  277 


[June, 


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COST  OF  FIELD  CROPS  IN  ILLINOIS 


61 


and  Fig.  6).  The  same  conditions  which  caused  increasing  operating 
expenses  with  wheat  likewise  affected  oats,  so  that  operating  expenses, 
expressed  in  percentages  of  the  first  period,  increased  67  percent  in  the 
second  period  and  140  percent  in  the  third. 

In  Hancock  county  three  years  of  the  first  period  were  unfavor- 
able to  oats  production  (1913,  1914,  and  1916).  The  low  yields  which 
resulted,  combined  with  the  low  price,  gave  a  loss  of  $4.02  an  acre  for 


IWS-lfa.  1411-19  |<570-1\ 

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CHAMPAIGN  AMD 


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WmPower 
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FIG.  6. — COST  OF  PRODUCING  OATS  IN  PRE-WAR,  WAR, 

AND  POST-WAR  PERIODS 

Oats  are  the  least  profitable  of  the  cereal  crops.  They  are  grown 
because  of  the  place  they  fill  in  the  rotation,  rather  than  as  a  direct 
profit  crop. 

the  period  (Table  6).  The  second  period  had  favorable  seasons  and 
good  prices,  and  returned  a  net  profit  of  $11.34  an  acre  on  oats.  Both 
yields  and  prices  declined  in  the  third  period,  making  a  loss  of  82  cents 
an  acre.  Operating  expenses  advanced  sharply  during  the  war  period, 
but  declined  slightly  in  the  last  period  because  of  a  reduction  in  the 
amount  of  man  labor  and  horse  labor  used. 

In  Champaign  and  Piatt  counties  the  average  yield  of  oats  and 
average  price  were  slightly  below  those  in  Hancock  county  for  the 
same  period  (Table  6).  The  lower  operating  expenses  were  offset  by 
the  higher  charge  for  interest  on  land ;  the  result  for  the  period  was  a 
net  loss  of  $5.24  per  acre. 

COST  OF  CLOVER  DURING  DIFFERENT  PERIODS 

The  cost  data  on  clover  include  only  those  crops  which  resulted 
from  a  fair  stand,  and  do  not  include  clover  failures  (Table  7  and 
Fig.  7).  The  cost  of  the  failures  was  charged  as  a  loss  to  the  whole 
farm  and  not  to  the  clover  crop.  On  some  farms  three-fourths  of  the 
clover  seedings  failed  to  secure  a  sufficient  stand  to  leave  for  a  hay  or 


62 


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[June, 


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COST  OF  FIELD  CROPS  IN  ILLINOIS 


63 


seed  crop.  The  more  general  use  of  limestone  on  many  of  the  farms 
would  have  decreased  the  number  of  failures  and  increased  the  yields 
secured ;  this  fact  is  borne  out  by  the  records  of  farms  which  met  the 
requirements  of  clover  in  regard  to  lime  and  methods  of  seeding,  and 
secured  good  stands  and  yields  approximately  80  percent  of  the  time. 
The  use  of  early  varieties  of  oats  as  nurse  crops  increased  the  cer- 
tainty of  securing  good  stands  of  clover. 


rno  -iz 

CHAMPAIGN  Ik/ID 


CH/.055 

•  Interest  on  Land 


IIS  Power 
VZ&Other  Expenses 


£M  Pasture 


FIG.  7. — COST  OF  PRODUCING  CLOVER  IN  PRE-WAR,  WAR, 

AND  POST-WAR  PERIODS 

Clover  proved  its  value  in  the  rotation  aside  from  its  merits 
as  a  soil  builder.  The  application  of  limestone  was  essential  in  se- 
curing good  stands  and  good  yields. 


Clover  in  Franklin  county  gave  a  net  profit  in  each  period;  $2.71 
per  acre  in  the  first,  $17.85  in  the  second,  and  $14.64  in  the  third.  The 
exceptionally  high  price  of  $20.13  per  ton  in  the  third  period  was  due 
to  the  fact  that  clover  hay  was  shipped  in  to  some  extent,  and  was 
valued  at  market  price  plus  the  cost  of  getting  it  to  the  farm.  Operat- 
ing expenses  on  clover  hay  showed  large  increases  with  each  succeeding 
period.  However,  it  is  significant  that  so  valuable  a  feed  as  clover  hay 
was  produced  in  Franklin  county  at  the  low  cost  of  $6.04  per  ton  in  the 
first  period,  $6.36  in  the  second,  and  $9.15  in  the  third. 

These  results  are  especially  significant,  since  the  acreage  of  clover 
on  which  cost  accounts  were  kept  increased  during  each  successive 
period,  altho  the  total  acreage  for  other  crops  and  the  number  of 
farms  decreased  during  the  last  period.  It  is  evident  that  the  value  of 
the  clover  crop  was  becoming  more  generally  recognized. 


64  BULLETIN  No.  277  [June, 

Clover  in  Hancock  county  yielded  a  net  profit  of  $23.28  an  acre  in 
the  second  period,  compared  with  losses  of  $1.23  in  the  first  and  $1.71 
in  the  third  (Table  7) .  This  large  profit  during  the  second  period  was 
due  largely  to  several  good  seed  crops,  the  price  of  which  averaged 
$21.75  per  bushel,  and  to  higher  yields  than  in  the  other  periods. 

The  net  loss  of  $1.92  an  acre  on  clover  in  the  last  period  in  Cham- 
paign and  Piatt  counties  was  caused  largely  by  the  low  yield,  which 
averaged  only  .89  ton  of  hay  and  .43  bushel  of  seed  an  acre,  and  by  the 
high  charge  for  land  (Table  7).  The  operating  expenses  were  much 
less  than  those  in  Hancock  county  for  the  same  period;  the  yields, 
while  comparable  in  the  two  areas,  were  far  below  the  possible  pro- 
duction. 

Except  for  the  last  period  in  Hancock  and  in  Champaign  and 
Piatt  counties  when  low  yields  were  secured,  clover  compared  favor- 
ably with  grain  crops  in  each  period  of  the  study.  This  would  indicate 
that  farmers  could  profitably  increase  the  production  of  this  crop  at 
least  to  the  amount  which  can  be  used  to  advantage  on  the  farm. 

VARIATIONS  IN  COSTS  ON  DIFFERENT  FARMS 

The  cost  of  producing  crops  varies  considerably  in  different  parts 
of  the  state,  largely  because  of  differences  in  soil,  but  to  some  extent 
because  of  differences  in  climate.  The  net  cost  of  producing  a  bushel 
of  corn  in  Franklin  county  during  the  ten-year  period  averaged  90 
cents  (Table  1),  while  for  the  same  period  in  Hancock  county  it  aver- 
aged 50  cents  (Table  2) .  The  net  cost  of  a  bushel  of  oats  in  Frank- 
lin county  averaged  60  cents  and  in  Hancock  county  40  cents.  Smaller 
differences  prevail  for  the  other  crops. 

The  differences  that  occur  in  the  cost  of  producing  the  same  crops 
in  the  same  areas  during  different  periods  under  different  weather  con- 
ditions and  changing  price  levels  are  shown  in  Tables  4,  5,  6,  and  7. 
The  net  cost  of  producing  a  bushel  of  corn  in  Franklin  county  dur- 
ing the  first  period  averaged  88  cents,  in  the  second  period  78  cents, 
whereas  in  the  third  period  it  increased  to  $1.30  (Table  4).  The  net 
cost  of  producing  a  bushel  of  wheat  in  Hancock  county  (Table  5)  was 
$1.35  in  the  first  period,  $1.01  in  the  second,  and  $1.05  in  the  third. 

IMPORTANCE  OF  MANAGEMENT  IN  DETERMINING  FARM  SUCCESS 
Important  as  these  differences  are  between  areas  and  between  dif- 
ferent periods,  they  are  not  as  large  as  the  differences  that  occur 
between  farms  in  the  same  area  during  the  same  year  on  similar  soil, 
and  under  practically  the  same  weather  conditions  and  price  levels. 
Occasionally  such  differences  are  accidental,  but  as  a  rule  they  are  due 
to  differences  in  the  managing  ability  of  the  farmers.  Such  variations 
are  apparent  from  the  records  in  Table  8,  which  shows  the  results  of 
cost  accounts  on  corn  kept  on  ten  farms  in  Hancock  county  in  1922. 


1926]  COST  OF  FIELD  CROPS  IN  ILLINOIS  65 

In  this  table  the  farms  are  arranged  according  to  the  net  cost  of  pro- 
during  a  bushel  of  corn.  The  difference  of  33  cents  between  Farm  1, 
showing  the  lowest  cost,  and  Farm  10,  showing  the  highest,  is  due,  it 
will  be  noted,  to  a  lower  acre  cost  combined  with  a  higher  yield  per 
acre. 

How  yields  affect  cost  may  be  observed  by  comparing  two  farms 
whose  operating  expenses  are  closely  comparable  but  whose  yields 
vary.  Farms  1  and  8  illustrate  this  point  very  strikingly,  for  while 
they  varied  only  slightly  in  total  operating  expenses  and  in  the  amounts 
devoted  to  the  different  items  making  up  the  totals,  they  varied  greatly 
in  yield  per  acre.  Farm  1  produced  its  corn  at  an  expense  of  $12.91 
an  acre,  and  Farm  8  at  $13.28.  The  number  of  hours  of  man  labor 
and  the  rate  per  hour  were  practically  the  same  on  the  two  farms;  the 
hours  of  horse  labor  were  similar,  tho  Farm  8  incurred  a  somewhat 
higher  rate,  bringing  the  expense  for  this  item  up  to  $5.93  an  acre 
compared  with  $4.69  on  Farm  1.  Machinery  and  seed  expense  were 
somewhat  higher  on  Farm  1,  but  this  was  partially  offset  by  the  higher 
general  farm  expense  on  Farm  8.  Turning  to  the  records  of  yields,  we 
find  that  Farm  1  produced  60.8  bushels  of  corn  to  the  acre,  while 
Farm  8  produced  only  48.5  bushels;  the  higher  yield  on  Farm  1 
brought  the  cost  per  bushel  down  to  28  cents,  while  on  Farm  8  it  was 
42  cents.  Since  the  operating  expenses  on  the  two  farms  were  slightly 
in  favor  of  Farm  1,  we  can  say  that  the  greater  cost  per  bushel  on  this 
farm  was  clearly  due  to  the  fact  that  the  yields  were  so  low. 

How  differences  in  operating  expense  affect  the  cost  of  the  crop 
is  illustrated  by  a  comparison  of  Farms  2  and  7.  These  farms  had 
approximately  the  same  yields — Farm  2  produced  63.8  bushels  of  corn 
to  the  acre  and  Farm  7,  63.7  bushels.  The  operating  expenses  on 
Farm  7,  however,  totaled  $21.42  an  acre,  as  against  $15.12  on  Farm  1. 
Expressed  on  the  bushel  basis,  the  corn  on  Farm  2  was  produced  at  a 
cost  of  31  cents,  and  on  Farm  7  at  a  cost  of  41  cents.  The  difference 
of  10  cents  was  due  mainly  to  the  fact  that  Farm  7  used  more  man 
and  horse  labor  per  acre  than  Farm  2,  incurred  a  higher  rate  for  horse 
labor,  and  had  higher  general  farm  expenses. 

The  above  farms  were  selected  for  illustration  because  they  show 
the  effect  which  differences  in  yields  and  in  operating  expenses  have 
on  the  cost  of  production  when  each  influences  the  result  independ- 
ently. Differences  among  farms,  however,  are  usually  the  net  result 
of  differences  both  in  yields  and  in  expenses,  as  may  be  observed  by 
further  analysis  of  the  figures  in  Table  8. 

Variations  similar  to  those  shown  for  corn  could  be  shown  for 
other  field  crops  also,  and  in  such  case  the  farms  in  Table  8  would 
doubtless  fall  into  different  ranking,  for  it  frequently  happens  that  a 
man  is  more  efficient  in  producing  one  crop  than  in  producing  another. 


66 


BULLETIN  No.  277 


[June, 


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Net  cost  per  bushel  
Number  of  acres  grown  .  . 
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Labor  per  acre 
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Bq 

1926]  COST  OF  FIELD  CROPS  IN  ILLINOIS  67 

Managerial  ability,  therefore,  must  be  measured  by  the  average  net 
income  per  acre  secured  from  all  products.  It  means  the  ability  to 
choose  the  more  profitable  crops,  to  determine  the  proportion  of  each 
to  grow,  and  to  produce  each  efficiently.  Variations  in  managerial 
ability,  as  expressed  in  each  of  these  factors,  result  in  wide  differences 
in  the  total  net  income  from  farms,  and  over  a  period  of  years  may 
mean  success  or  failure. 

APPLYING  THE  RESULTS  OF  COST-OF-PRODUCTION 

STUDIES 

Cost-of-production  studies  conducted  in  a  region  over  a  period 
of  years  are  valuable  in  showing  the  relative  profitableness  of  crops. 
This  information,  together  with  a  knowledge  of  local  conditions,  may 
well  be  used  as  a  basis  for  planning  profitable  cropping  systems. 

A  study  of  the  changes  in  the  cost  of  producing  crops  and  in  the 
incomes  from  them  from  year  to  year  during  a  period  when  prices  are 
changing,  shows  the  importance  of  studying  price  relationships  if  one 
is  to  keep  his  farm  practices  so  adjusted  as  to  realize  the  highest 
returns  from  the  farm  as  a  whole. 

The  importance  of  management  as  a  factor  in  determining  farm 
same  crop  on  farms  located  in  the  same  community  and  operated 
success  is  demonstrated  by  variations  in  the  cost  of  producing  the 
under  similar  climatic  conditions. 


UNIVERSITY  OF  ILLINOIS-URBANA 


